WSJ: Individual Investors Return to Stock Trading in Big Numbers

Retail investors are getting back to trading stocks in a major way, after many abandoned the market following its 2008-09 plunge.

Some experts are concerned that average investors are snapping up stocks just as the market may be reaching its top, The Wall Street Journal reports. The Standard & Poor's 500 Index has soared 175 percent since March 2009.

Some individuals may have been selling stocks too. In January, when the S&P 500 dipped 3.6 percent, daily trades rose 27 percent at E*Trade from a year earlier, 28 percent at TD Ameritrade and 17 percent at Schwab, according to the paper.

And small investors aren't just trading with cash. Margin debt surged to a record peak of $444.93 billion, according to the New York Stock Exchange.

As for the risk of stock purchases by retail investors, "systematically over the last seven years [they] have bought high and sold low," David Edwards, president of Heron Financial Group, tells The Journal.

To be sure, other experts see room for more gains by stocks. "You have very strong momentum, and there's cash on the sidelines," Kevin Caron, market strategist at Stifel, Nicolaus & Co., tells Reuters.

Weak economic data aren't having much market impact because of the weather's influence, he says. And with 10-year note Treasury note yields below 3 percent, "equities are one of the few games in town."